To invest in leadership or not invest? That is the question.
I have a great vantage point as a coach where I can truly see the benefits of investing in leadership development. Because the world needs more leaders who understand how to adapt to change and strive for personal and professional growth, my next three blogs will focus on the benefits of investing in leadership development. I share specific benefits, as well as the disadvantages that executives, entrepreneurs, and teams may experience without dedicating resources to advancing leadership.
Keep and Attract Great Talent
When you invest in leadership development, you retain your people and reduce recruitment expenses.
Developed leaders are effective at addressing issues, moving new ideas forward, developing high-performing teams and individuals, and can make things happen in a way that creates a positive culture and a company that can scale, grow and deliver great results. Well-developed leaders are strong in:
- Developing high-performing teams.
- Building strong plans that align resources, team members, and stakeholders to accomplish strong results.
- Earning respect based on their strong skills and ability to define solutions that integrate the ideas and needs of others to improved outcomes.
- Building opportunities and new plans that make the company stronger and increase profitability.
- Honing the asset of themselves to move, touch, and inspire others to accomplish the needs of the company/organization.
- Being well-organized, skilled, and effective at seeing the strategy, building the objectives, and taking action through dynamic team skills to deliver results.
Without an investment in leadership development, you risk losing your people.
- Employees leave incompetent leaders. In fact, 75% of people voluntarily leaving jobs don’t quit their jobs, they quit their bosses!
- Even worse than leaving, sometimes employees stay and do average work.
Average and undeveloped leadership leads to increased turnover and average performance.
Turnover may vary by wage and role of employee. According to a CAP study, average costs to replace an employee are:
- 16% of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year).
- 20% percent of annual salary for midrange positions (earning $30,000 to $50,000 a year).
- Up to 213% of annual salary for highly educated executive positions.
Josh Bersin of Bersin by Deloitte breaks down the employee retention issue, identifying several key factors that contribute to the costs of losing and replacing an employee:
- Hiring costs include advertising, interviewing, screening, and hiring.
- Onboarding costs of training and management time.
- Lost productivity. It may take a new employee one to two years to reach the productivity of an existing employee.
- Lost engagement. Other employees who see high turnover tend to disengage and lose productivity.
- Customer service and errors. For example, new employees take longer and are often less adept at solving problems.
- Training costs. Over two to three years, a business likely invests 10-20% of an employee’s salary or more in training.
- Cultural impact. Whenever someone leaves, others take time to ask why.
When you invest in leadership development, you are increasing effectiveness.
The right, consistent leadership can increase the productivity of your people. Leadership today requires emotional intelligence skills to create strong cultures and move projects, people, and results forward. Having a leadership team that is fully developed allows a company to scale and grow with ease.
Effective leadership is about understanding your employees’ needs and desires:
- Being smart about emotions and using empathy to empower and engage others.
- Encouraging your team to reach new levels of performance transforms average employees into outstanding employees.
Those who don’t invest in leadership development risk low performance, confusion, and low morale.
Undeveloped or underdeveloped leadership creates a lack of leaders who have the fundamental skills to manage and lead teams effectively. These leaders tend to think people can’t change; therefore, believe “I don’t need new skills,” “I don’t have time,” “they are the problem,” and/or “I don’t want to do the work that is required to truly lead and manage others.” Because the leader does not want to learn and grow, their team does not learn or grow.
When you invest in leadership development, you create leaders who can develop future leaders.
Growing future leaders supports succession planning, confidence in the company’s future, and offers career pathways to employees, further increasing retention.
“Leaders are not born, they are built.” – Vince Lombardi
The most successful small and large companies know this secret – you need to be strategic about developing and growing future leaders. Quality leadership is a combination of the right qualities and the right training. Without a strategy, leadership roles are often given to the most forward candidates with dominant personalities or favored individuals. Identify those who have what it takes and provide them with targeted leadership training.
Don’t invest in leadership development and you can guarantee average performance.
The business cannot scale effectively because there is a lack of leadership. Company growth is stunted from:
- A tendency to be more problem-centric vs. opportunity-focused.
- Low tolerance for risk to support growth.
- Ineffective decision-making.
- Pointing fingers at why there are problems and the tendency to live with them.
- Disorganized workflow and communications.
Learn more about steps you can take now to invest in leadership development to retain great talent, increase effectiveness, and grow your company. Connect to grow.